Exploring a Bond-Centric Future

RenjiZeniverse

Hello there.

I very much agree with the rgOHM idea you mentioned.

I see a lot of similarities between your post and a recent mega (50 post) thread that I posted on Twitter (about KLIMA and OHM both).

It was (quite serendipitously) posted sandwiched around Zeus’ post directing people here. However, it was also written without knowledge of the “internal” bonds and other mechanisms Zeus mentioned.

I think we both have spent a lot of time thinking about this topic. Cheers, and I am glad to have run into you out here.

I’d humbly ask you to read through my post and give me any feedback or share your thoughts. I also wrote and extrapolated a bit in the forums here.

I think illiquid staking is almost necessary, and I’d love feedback specific to that if you have any. Vested rgOHM would achieve this too.

link to thread:

https://twitter.com/Chees_eth/status/1492267892213174278?s=20&t=zgGnZgH_LGJEDtFFgpSYEQ

Clarification on my post regarding the trading strategies and the enabling smart contract:

A bond owner would simply need to tell the contract:

• My ask price (Y) for this bond shall be: Y = k * x + m, with k = say 0.5 and m = 90.

This is a "set & forget " instruction (possible to update). As x represents time, the contract will at any given moment be able to calculate the current ask price based on current timestamp, and execute the swap with an interested buyer.

Very much in favour of the proposal, strong and well written paper of Zeus & Indigo.

My only worries:

• User education

• Direct fiat on ramps for OHM to make things very easy & accessible for ALL end users

bubbidubb

Super impressed by this work, but I am currently far too tired to give this a proper read. I will circle back asap, I promise. I’ll try for tomorrow.

I will give your (super high quality) work the attention it deserves, and I would also humbly ask you to see my comments here. Especially my linked Twitter thread (that I will also drop below). I wrote it for KLIMA and OHM but it’s more general to all POLs. It’s not nearly the quality of this here, but I think and hope you will easily follow my logic.

I have kinda reached the conclusion that illiquid locked staking of some sort is going to be key to improve market dynamics (in early POL stage especially). I do not think that the internal bonds accomplish, since they are made liquid by design.

The argument on Twitter and on here is sloppy. IDEK that I ste my conclusion clearly, but maybe keep that in mind if you do read my work.

Thanks again for the high quality content!

Link to my Twitter thread:

https://twitter.com/Chees_eth/status/1492267892213174278?s=20

biscuit

Valid point, but I think the long term stakers would want to use internal bonds instead of just staking.

Rephrase: What you said is true but I think that the internal bonds are meant to replace staking for long term folks.

Long stakers could just buy long dur bond tokens from LP to do that. The secondary market would set APY for each dur vault in real time.

Fin maths rephrase:

In a normal (regards to market condition), rational market, where LP is high liquid for a trade range and amt: FV[bond] > FV[staked] for any given principal since (bond apy > staking apy).

That means PV[bond] < PV [stake] (it’s better to buy bond and hold that than just stake).

I have made a few comments here and mega thread on Twitter if this is interesting to you.

I also have reached the preliminary conclusion that illiquid locked stakes will be essential to “correct” the current market dynamics.

These proposed internal bonds are made liquid by vaults. Therefore I think they have little / no impact on the overall market dynamic.

Bond vault LPs will probably each bear exactly as much selling & rebase selling as they can possibly bear. Top level POL sell pressure remains almost the same with this dynamic. Therefore the market dynamics I describe on Twitter (see my other comments here for link) are unchanged and the cycle continues.

I’d love to be wrong and I am hoping that I’m missing something. I’ll rest and circle back when I have the mental stamina.

BTCBrian

Thanks BTCBrian. I enjoyed reading your megathread - good stuff. It was like a poke in my ribs to sell my fork positions, and shift my funds back into Olympus .. I agree with much of your problem formulation in regards to early stage forks (the bootstrapping). Olympus itself is emerging out of this phase and now shifting gears. While forks are still using v1 technology, Olympus has migrated to v2 since a pair of weeks. Several of the things you suggest as a solution are now being applied by King Olympus.

• Autostaking
• Variable bond durations

What Zeus has described above, is the immutable future. It is already in the King contract. Even if OlympusDAO should take no further action to push towards the "explored future" - the rules are set and the chips will fall as they may. What remains to explore is the volume allocation between unlocked (staked) and locked (bonded) - the segmentation.

Illiquid positions - that is not in the cards for the King. What may suit forks, may not necessarily be right for Olympus. But I do agree with exploring incentives for users to accept longer bond durations. For Olympus, I put one option down in the proposal for vote boost multipliers receiving no comments, no likes . I do hope somebody picks up on that proposal, and reads between the lines before a forker does. Could ofc also be a really bad idea, idk …

Zeus sounds like something we could help with at Premia. Happy to talk more on market implementation as well as bond vaults over the coming weeks. I think they align nicely with what we have coming out soon.

Zeus

I have put extensive thought into this topic, and complied a thread on Twitter that lays out my thoughts pretty clearly (I think).

I’d humbly implore anyone who read the post above to go take a look at this thread that is directly related to topics above (and more).

https://twitter.com/Chees_eth/status/1493110819831394304?s=20&t=tGrOR5dTgSJFNb0Y5wRBCA

https://twitter.com/Chees_eth/status/1493110819831394304?s=20&t=tGrOR5dTgSJFNb0Y5wRBCA

bubbidubb

Thanks for the reply and feedback.

Here’s the part I have not said out loud yet:

I’d say that leaves a pretty bad flaw in the POL system IMO. Incentives will still not align properly. This flaw has been there since day 1, and the proposal will not resolve it. That’s a bummer.

I cannot give more of myself to this right now; I don’t have more to give. So, I can’t really explain the above statement more than I have already.

I’ve pretty much said my piece, and it kinda sounds like what’s done is done? Maybe I can get a thread out in time to make a difference next time?

Wishing all of you all the best though. Honestly! Your a bunch of smart people out here (and builders are mf legends imo — Ty to any who see this!).

Novel DeFi-native systems are always a great experiments and worth a try at the very least. Please keep on building, talking, and working together out here.

Together we all can really make a better system for everyone (if we all keep trying).

Forgive me haven't read white paper just yet so have some conceptual questions. Seems your are imaging/proposing that OlympusDOA serves as an axis-mundi/bonder of last resort for bonding activities where OHM serves as the currency of exchange.

What happens if a 3rd party bond vault defaults? Can these semantics be encapsulated into the protocol?

Would there need to some independent bond ratings mechanism that would need to evolve in parallel?

Maybe TradFi questions but to some extent ontogeny recapitulates phylogeny.

bubbidubb

TY for that.

I was kinda unclear on your position or not, but I left that there for everyone regardless. The feelings I expressed about finally / direction we’re based on things outside your comments.

Pretty sure I’m going dark soon. One last loose thread to tie up, but maybe someday another anon jpeg will have something to say.

It’s been kinda fun, maybe I’ll do this again.

Cheers to you, and thanks for reading. Good luck out here, LLAP

P.S. if mr loose thread wants to log into discord and let me return to the void, that would be great.

greatly need a powerpoint to present your idea.

Peter33

Graphs would definitely be nice too.

First a foremost, a (completed and much neater) spreadsheet. I’ll pick up where I left off last ASAP, but I would only want to discuss that with the team directly tbh.

I left a tweet for them to find me pinned top the TL. Idk if you can / want to get that to the right people

In my view conceptually the difference between OHM internal bonding and OHM staking is two factors:

• active participation
• time locking.

For example you could have a bond that matures in 8 hours and pays the staking rate as opposed to OHM that is staked and unstaked after an 8 hour reward cycle. The difference is the bond requires active participation and one would be penalised for early withdrawal.

If this presumption holds true the transition we would like to make is from shorter term and passive rewarding through staking to longer term active incentivised rewarding, with longer locking. This would be beneficial to the protocol and demand a more conscious sacrifice and dedication from the ohmies.

The question to ask at this point is are we ready for this approach? Has the protocol reached a stage beyond the need for high passive rewards and ready for more mature conscious adoption. My answer for this is conditional on the growth of the ecosystem and healthy projected roadmap, both of which I think are in check. Onwards.

Nicely explained thank you.